Having started the year brimming with hopes that the Federal Reserve’s easing will lift markets across Asia, multi-asset managers are now turning more selective under a drastically different environment. A hawkish pivot by the region’s central banks to protect their currencies has sapped the appeal of bonds, a traditional safe haven, putting the onus on stocks to deliver returns.
A higher-for-longer interest rate environment is burnishing the credentials of cheap Chinese stocks and driving value investment strategies in Asia.
Corporate reforms in Japan and South Korea will support a value thesis, according to JPMorgan Asset Management and AllianzGI. Meanwhile, M&G Investment Management is attracted by near record-low valuations for Chinese stocks. Other haven plays are exporters and India’s domestic-driven equities.
